FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)
[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE     ACT OF 1934

                    For the quarter ended September 30, 2006

                                       OR

[    ]     TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE     ACT OF 1934

             For the transition period from __________ to __________

                 Commission File Number                 1-12727
                                                      ----------


                          SENTRY TECHNOLOGY CORPORATION
                          -----------------------------
        (Exact name of small business issuer as specified in its charter)

       Delaware                                        96-11-3231714
     ----------                                        -------------
(State or other jurisdiction of             (I.R.S. Employer Identification
incorporation  or organization)                          No.)

    1881  Lakeland  Avenue,  Ronkonkoma,  NY                    11779
-------------------------------------------------------         -----
    (Address of principal executive offices)                 (Zip Code)


                                 631-739-2000
                                 ------------
              (Registrant's telephone number, including area code)


    (Former name, former address and former fiscal year, if changed since last
                                     report)

Check  whether  the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
12  months  (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90  days.


     Yes     X          No
             -

Indicate  by check mark whether the registrant is a shell company (as defined in
Rule  12b-2  of  the  Exchange  Act).

     Yes               No      X
                              ---


As  of  November  14,  2006,  there  were  120,743,804  shares  of  Common Stock
outstanding.

Transitional  Small  Business  Disclosure  Format  (check  one)

     Yes               No      X
                              ---



<PAGE>



                          SENTRY TECHNOLOGY CORPORATION
                          -----------------------------
                                      INDEX
                                      -----




                                                             Page No.
                                                             --------

PART I.   FINANCIAL INFORMATION
-------------------------------

Item 1.     Financial Statements (Unaudited)

     Consolidated Balance Sheets --
     September 30, 2006 and December 31, 2005                    3

     Consolidated Statements of Operations --
     Three Months Ended September 30, 2006 and 2005
     And Nine Months Ended September 30, 2006 and 2005           4

     Consolidated Statements of Cash Flows --
     Nine Months Ended September 30, 2006 and 2005               5

     Notes to Consolidated Financial
     Statements - September 30, 2006                           6 - 12


Item 2.     Management's Discussion and Analysis of
     Financial Condition and Results of Operations            13 - 16


Item 3.     Controls and Procedures                              16



PART II.   OTHER INFORMATION
----------------------------

Item 6.     Exhibits                                          16 - 17


Signatures                                                       17






<PAGE>



PART I.   FINANCIAL INFORMATION
-------------------------------

Item 1.     Financial Statements (Unaudited)


<TABLE>
<CAPTION>
<S>                                                                <C>                    <C>
SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                                   September 30,          December 31,
                                                                       2006                   2005
                                                                   -------------          ------------
                                                                    (Unaudited)            (Audited)
ASSETS
---------------
CURRENT ASSETS
    Cash and cash equivalents                                         $     397           $    842
    Accounts receivable, less allowance for doubtful
      accounts of $135 and $141, respectively                             2,122              2,762
    Inventories                                                           3,277              2,709
    Prepaid expenses and other current assets                               472                318
                                                                      ----------          ---------
                                  Total current assets                    6,268              6,631

PROPERTY, PLANT AND EQUIPMENT, net                                          623                637
GOODWILL                                                                  1,564              1,564
OTHER ASSETS                                                                410                563
                                                                      ----------          ---------

                                                                      $   8,865           $  9,395
                                                                      ==========          =========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
    Revolving line of credit                                          $   2,416           $  2,039
    Accounts payable                                                        703                489
    Accrued liabilities                                                   1,516                925
    Obligations under capital leases - current portion                        5                  6
    Deferred income                                                         105                 99
                                                                      ----------          ---------
                                  Total current liabilities               4,745              3,558


OBLIGATIONS UNDER CAPITAL LEASES -
    non-current portion                                                       9                  1
DEFERRED TAX LIABILITY                                                       60                  58
CONVERTIBLE DEBENTURES                                                    1,935               1,904
MINORITY INTEREST                                                         1,247               1,140
OTHER LIABILITIES                                                            63                  36
                                                                      ----------          ----------
                                  Total liabilities                       8,059               6,697

SHAREHOLDERS' EQUITY

    Common stock, $0.001 par value; authorized 160,000 shares,
     issued and outstanding 120,744 and 120,629                             121                 121
    Additional paid-in capital                                           48,856              48,783
    Accumulated deficit                                                 (48,419)            (46,408)
    Other accumulated comprehensive income                                  248                 202
                                                                      ----------           ---------
    Total shareholders' equity                                              806               2,698
                                                                      ----------           ---------

                                                                      $   8,865            $  9,395
                                                                      ==========           =========

See notes to the consolidated financial statements.

</TABLE>


<PAGE>

SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

<TABLE>
<CAPTION>

<S>                                                 <C>                 <C>                  <C>               <C>


                                                         Three Months Ended                        Nine Months Ended
                                                            September 30,                            September 30,
                                                     ---------------------------                ------------------------
                                                     2006                 2005                  2006              2005
                                                             (Unaudited)                              (Unaudited)
REVENUES
   Sales                                            $  2,231            $  3,343             $  7,042          $  8,718
   Service, installation and other                       512                 518                1,341             1,903
                                                    ---------           ---------            ---------         ---------
                                                       2,743               3,861                8,383            10,621

COSTS AND EXPENSES:
   Cost of sales                                       1,217               1,793                3,775             4,688
   Customer service expenses                             520                 587                1,601             2,038
   Selling, general and administrative expenses        1,287               1,479                3,964             4,017
   Research and development                              210                 191                  614               638
                                                    ---------           ---------            ---------         ---------
                                                       3,234               4,050                9,954            11,381
                                                    ---------           ---------            ---------         ---------

OPERATING LOSS                                          (491)               (189)              (1,571)             (760)
INTEREST AND FINANCING EXPENSES                          141                  80                  309               249
                                                    ---------           ---------            ---------         ---------

LOSS BEFORE INCOME TAXES AND
   MINORITY INTEREST                                    (632)               (269)              (1,880)           (1,009)
INCOME TAX EXPENSE                                        30                   9                   70                29
                                                    ---------           ---------            ---------         ---------
LOSS BEFORE MINORITY INTEREST                           (662)               (278)              (1,950)           (1,038)
MINORITY INTEREST                                        (21)                (18)                 (61)              (48)
                                                    ---------           ---------            ---------         ---------
NET LOSS                                            $   (683)           $   (296)            $ (2,011)         $ (1,086)
                                                    =========           =========            =========         =========
NET LOSS PER SHARE
   Basic and diluted                                $  (0.01)           $  (0.00)            $  (0.02)         $  (0.01)
                                                    =========           =========            =========         =========

WEIGHTED AVERAGE SHARES
   Basic and diluted                                 120,744             120,629              120,707           102,582
                                                    =========           =========            =========         =========


See notes to the consolidated financial statements.
</TABLE>

<PAGE>



SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>


<S>                                                  <C>

                                                                       Nine Months Ended
                                                                          September 30,
                                                                   --------------------------
                                                                    2006               2005
                                                                    -----              -----
                                                                            (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Loss                                                        $(2,011)         $(1,086)
   Adjustments to reconcile net loss
     to net cash (used in) provided by operating activities:
     Depreciation and amortization                                     234              242
     Provision for bad debts                                            25              (12)
     Deferred income taxes                                               2              (57)
     Non cash consideration                                            108               45
     Minority interest in net loss of consolidated subsidiary           54               31
   Changes in operating assets and liabilities:
     Accounts receivable                                               714              656
     Inventories                                                      (568)             361
     Prepaid expenses and other assets                                (104)              72
     Accounts payable and accrued liabilities                          805             (104)
     Deferred income                                                     6              (66)
     Other liabilities                                                  27              ---
                                                                   --------         --------

     Net cash (used in) provided by operating activities              (708)              82
                                                                   --------         --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                  (91)             (90)
   Intangibles                                                         (26)             (26)
                                                                   --------         --------

     Net cash used in investing activities                            (117)            (116)
                                                                   --------         --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net change in debt under the revolving line of credit               377             (764)
   Repayment of notes payable                                          ---             (189)
   Repayment of obligations under capital leases                        (4)              (4)
   Proceeds from exercise of stock options                               7                4
                                                                   --------         --------

     Net cash provided by (used in) financing activities               380             (953)
                                                                   --------         --------

DECREASE IN CASH AND CASH EQUIVALENTS                                 (445)            (987)

CASH AND CASH EQUIVALENTS, at beginning of period                      842            1,965
                                                                   --------         --------
CASH AND CASH EQUIVALENTS, at end of period                        $   397          $   978
                                                                   ========         ========


See notes to the consolidated financial statements.


</TABLE>

<PAGE>



SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2006


NOTE  1  --  Basis  of  Presentation
------------------------------------
The  consolidated financial statements include the accounts of Sentry Technology
Corporation  ("the  Company")  and  its  majority-owned  subsidiaries.  All
intercompany  accounts  and  transactions have been eliminated in consolidation.

The  accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of  America  for interim financial information and with the instructions to Form
10-QSB  and  their  basis of application is consistent with that of the previous
year.  Accordingly,  they  do  not  include all of the information and footnotes
required  by  accounting  principles  generally accepted in the United States of
America  for  complete  financial  statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair  presentation  have  been  included.  Interim  results  are not necessarily
indicative of the results that may be expected for a full year.  These financial
statements should be read in conjunction with the audited consolidated financial
statements  and notes thereto included in Sentry's Annual Report to Stockholders
on  Form  10-KSB  for the fiscal year ended December 31, 2005, as filed with the
Securities  and  Exchange  Commission  ("SEC").

Certain prior period amounts have been reclassified to conform to current period
presentation.


NOTE  2  --  Going  Concern
---------------------------
The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America  with the assumption that the Company will be able to realize its assets
and  discharge  its  liabilities  in  the  normal  course  of  business.

The  Company  has  incurred  operating  losses,  reduced  levels  of revenue and
decreased  financial position as a result of not meeting its business plan.  Due
to  continued  losses,  as  of September 30, 2006, the Company was in default of
certain financial covenants under the credit agreement.   The Company has losses
of  $2.0  million  for  the nine month period ended September 30, 2006 and as at
September  30,  2006,  the  Company had an accumulated deficit of $48.4 million.
The  Company's  continuation as a going concern is uncertain.  Management's plan
is  to continue raising additional funds through future equity or debt financing
until  it  achieves profitable operations.  Although the Company plans to pursue
additional  financing there can be no assurance that the Company will be able to
secure  financing  when  needed  or  obtain  such  on  terms satisfactory to the
Company,  if at all.  The Company's continuation as a going concern depends upon
its  ability  to  raise  funds  and  achieve  and sustain profitable operations.

The  accompanying  consolidated  financial statements do not include any
adjustments  to  reflect  the  possible future effects on the recoverability and
classification  of  assets or the amounts and classification of liabilities that
may  result  from  the  inability of the Company to continue as a going concern.


NOTE  3  --  Recent  Accounting  Pronouncements
-----------------------------------------------
In  September  2006,  the  SEC  issued  Staff  Accounting  Bulletin  No.  108,
"Considering  the  Effects  of  Prior  Year  Misstatements  when  Quantifying
Misstatements  in  Current  Year  Financial  Statements"  ("SAB  108").  SAB 108
provides  guidance  on  how  prior  year  misstatements  should  be  taken  into
consideration  when  quantifying  misstatements  in  current  year  financial
statements  for  purposes  of  determining  whether the current year's financial
statements  are  materially misstated. SAB 108 permits registrants to record the
cumulative  effect  of  initial adoption by recording the necessary "correcting"
adjustments  to  the  carrying

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2006


values  of  assets  and  liabilities  as  of the beginning of that year with the
offsetting  adjustment recorded to the opening balance of retained earnings only
if  material under the dual method. SAB 108 is effective for fiscal years ending
on  or  after November 15, 2006. The Company has assessed the effect of adopting
this  guidance  and has determined that there will be no impact on the Company's
consolidated  financial  statements.

In  September  2006,  the  Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  157, "Fair Value
Measurements,"  which  is  effective  for  calendar year companies on January 1,
2008.  The  Statement  defines fair value, establishes a framework for measuring
fair  value  in  accordance  with  Generally Accepted Accounting Principles, and
expands  disclosures  about  fair value measurements. The Statement codifies the
definition of fair value as the price that would be received to sell an asset or
paid  to  transfer  a  liability  in  an  orderly  transaction  between  market
participants  at the measurement date. The standard clarifies the principle that
fair value should be based on the assumptions market participants would use when
pricing  the  asset  or  liability  and  establishes a fair value hierarchy that
prioritizes  the  information  used to develop those assumptions. The Company is
currently  assessing  the  potential  impacts  of  implementing  this  standard.

In  September  2006, the FASB issued Statement of Financial Accounting Standards
No.  158,  "Employers'  Accounting  for  Defined  Benefit  Pension  and  Other
Postretirement  Plans  - an amendment of FASB Statements No. 87, 88, 106 and 132
(R)"  ("SFAS 158"). SFAS 158 requires an employer to recognize the funded status
of  a  defined  benefit  postretirement  plan  as  an  asset or liability in its
statement  of  financial position and to recognize changes in that funded status
in  the year in which the changes occur through comprehensive income. The funded
status  of a benefit plan is defined as the difference between the fair value of
the plan assets and the plans benefit obligation. For a pension plan the benefit
obligation  is the projected benefit obligation and for any other postretirement
benefit  plan, such as a retiree health care plan, the benefit obligation is the
accumulated  postretirement benefit obligation. SFAS 158 requires an employer to
recognize  as  a  component of other comprehensive income, net of tax, the gains
and  losses  and prior service costs or credits that arise during the period but
that  are not recognized as components of net periodic benefit costs pursuant to
SFAS 87 "Employees' Accounting for Pensions." SFAS 158 also requires an employer
to  measure  the  funded  status  of  a  plan  as  of  the date of its year-end.
Additional  footnote  disclosure  is  also required about certain effects on net
periodic  benefit cost for the next year that arise from the delayed recognition
of  gains  or  losses,  prior  service costs or credits, and transition asset or
obligation.  Except  for  the  year-end  measurement  requirement,  SFAS  158 is
effective for the year ending December 31, 2006. The Company does not anticipate
that the adoption of this Statement will have a material effect on its financial
condition  or  operations.

In July 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in  Income  Taxes - an interpretation of FASB No. 109" ("FIN 48"), effective for
fiscal  years  beginning  after  December  15, 2006.  FIN 48 requires a two-step
approach  to determine how to recognize tax benefits in the financial statements
where recognition and measurement of a tax benefit must be evaluated separately.
A  tax  benefit  will  be  recognized  only if it meets a "more-likely-than-not"
recognition  threshold.  For  tax  positions  that  meet this threshold, the tax
benefit recognized is based on the largest amount of tax benefit that is greater
than  50  percent  likely  of  being  realized upon ultimate settlement with the
taxing  authority.  The  Company  is currently evaluating the impact of adopting
FIN  48,  and  has  not  yet determined the significance of this new rule to our
overall  results  of  operations,  cash  flows  or  financial  position.

In  March  2006,  the  FASB  issued  Statement 156, "Accounting for Servicing of
Financial  Assets  - an amendment of FASB Statement No. 140," ("SFAS 156") which
amends SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments  of  Liabilities."  In  a  significant  change

<PAGE>


SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2006


to  current  guidance,  SFAS  No.  156 permits an entity to choose either of the
following subsequent measurement methods for each class of separately recognized
servicing  assets  and  servicing  liabilities:

(1)  Amortization  Method or (2) Fair Value Measurement Method.  SFAS No. 156 is
effective as of the beginning of an entity's first fiscal year that begins after
September  15, 2006.  The Company is currently reviewing the effect, if any, the
proposed  guidance  will  have  on  its  financial  statements.

In  February  2006,  the  FASB issued Statement No. 155, "Accounting for Certain
Hybrid  Financial Instruments - an amendment of FASB Statements No. 133 and 140"
("SFAS 155").  This Statement permits fair value of remeasurement for any hybrid
financial  instrument  that contains an embedded derivative that otherwise would
require  bifurcation;  clarifies  which  interest-only strips and principal-only
strips  are  not  subject  to  the requirements of SFAS No. 133, "Accounting for
Derivative  Instruments  and  Hedging  Activities"; establishes a requirement to
evaluate  interests  in  securitized financial assets to identify interests that
are  freestanding  derivatives  or  that  are  hybrid financial instruments that
contain  an  embedded  derivative  requiring  bifurcation;  clarifies  that
concentrations  of  credit  risk  in  the form of subordination are not embedded
derivatives;  and  amended SFAS No. 140, "Accounting for Transfers and Servicing
of  Financial  Assets  and  Extinguishments  of  Liabilities",  to eliminate the
prohibition  on  a  qualifying  special-purpose entity from holding a derivative
financial  instrument  that pertains to a beneficial interest other than another
derivative  financial  instrument.  SFAS  No. 155 is effective for all financial
instruments  acquired,  issued,  or subject to a remeasurement (new basis) event
occurring after the beginning of an entity's first fiscal year that begins after
September  15, 2006.  The Company is currently reviewing the effect, if any, the
proposed  guidance  will  have  on  its  financial  statements.

In  December  2004,  the  FASB  issued SFAS No. 123 (revised 2004), "Share Based
Payment"  ("SFAS  No.  123R"). SFAS No. 123R requires the Company to measure the
cost  of  employee  services  received  in  exchange  for  an  award  of  equity
instruments  based  on  the  grant date fair value of the award. The cost of the
employee  services  is  recognized  as compensation cost over the period that an
employee  provides service in exchange for the award. SFAS No. 123R is effective
January  1,  2006  for  the Company and was adopted using a modified prospective
method  during  the quarter ended March 31, 2006.  Note 8 provides disclosure on
the  effect  of  the  adoption  of  SFAS No. 123R on net income and earnings per
share.


NOTE 4 -- Inventories
---------------------
Inventories consist of the following:
                                       September 30, 2006      December 31, 2005
                                       ------------------      -----------------
                                                    (in thousands)
Raw materials                             $     1,118           $     1,101
Work-in-process                                   227                   279
Finished goods                                  1,932                 1,329
                                          -----------           -----------
                                          $     3,277           $     2,709
                                          =     =====           =     =====

Reserves  for excess and obsolete inventory totaled $1,180,000 and $1,261,000 as
of September 30, 2006 and December 31, 2005, respectively and have been included
as  a  component  of  the  above  amounts.


NOTE 5 -- Credit Facilities
---------------------------
In  May  2006,  the  Company and certain of its subsidiaries amended its secured
credit  facility  with Royal Bank of Canada ("RBC") by extending the term of the
agreement  through  May  2007  and  modifying  certain  financial covenants.  In
addition,  the  maximum  borrowings  under the facility were reduced to Canadian
$3.6

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2006


million  (U.S.  $3.2 million). However, RBC increased the borrowing base formula
by  Canadian  $1.0  million  (U.S. $895,000) in exchange for additional security
provided  by  two  of the Company's directors. Borrowings under the facility are
subject  to  certain  limitations  based  on  a  percentage of eligible accounts
receivable and inventories as defined in the agreement. Interest is payable at a
rate of Royal Bank of Canada prime rate (6.0% at September 30, 2006), plus 1.75%
per  annum.  Borrowings  under this facility are secured by substantially all of
the  Company's  assets.  As of September 30, 2006, the Company had borrowings of
$2.4 million, which was the maximum available under the facility. As a result of
continued  losses,  as  of  September  30,  2006,  the Company was in default of
certain financial covenants under the credit agreement. The Company is presently
in  negotiations  with  RBC  to  further  amend  the  covenants.


NOTE 6 - Comprehensive Income (Loss)
------------------------------------
Comprehensive  income  (loss)  is  as  follows:

                                        Three Months Ended     Nine Months Ended
                                           September 30,         September 30,
                                        2006        2005        2006       2005
                                        ----        ----        ----       ----
                                                     (in thousands)
Net loss:                             $ (683)     $ (296)     $(2,011)  $(1,086)
Other  comprehensive  income  (loss):
Foreign currency translation
   adjustments                            (3)         95           46        45
                                      -------     -------     --------  --------

Comprehensive loss                    $ (686)     $ (201)     $(1,965)  $(1,041)
                                      =======     =======     ========  ========


NOTE 7 -- Related Party Transactions
------------------------------------
At the end of the second quarter of 2006, Mr. Murdoch, Sentry's CEO and Director
and  Mr.  Furst,  a  Sentry  Director,  provided personal guarantees to RBC, the
Company's  lender,  in  the  amount  of  Canadian  $1 million (U.S. $895,000) in
exchange for the bank providing increased availability under its credit facility
to  the  Company  by the same amount.  In consideration of these guarantees, Mr.
Murdoch  and Mr. Furst will receive a fee of $43,000, to be shared between them,
paid  in  12  equal  monthly  installments.  As  additional  consideration, they
received  fully  vested, two year warrants to purchase approximately 2.9 million
shares  of  the Company's common stock, at an exercise price of $0.10 per share.
The  fair  value of these warrants of $120,000 was determined in accordance with
SFAS  No. 123R "Share-Based Payment" and beginning in June 2006 is being written
off over the period of the guarantee, which is one year.  For the three and nine
month  periods  ended September 30, 2006, $30,000 and $40,000 have been recorded
in  interest  and  financing  expense  related  to  these  warrants.


NOTE  8  --  Earnings  Per  Share
---------------------------------
The  earnings  per  share calculations (basic and diluted) at September 30, 2006
and 2005 are based upon the weighted average number of common shares outstanding
during  each  period.  There  are  no  reconciling  items  in  the  numerator or
denominator  of  the  earnings  per  share calculations in either of the periods
presented.  Options  to  purchase 2,455,000 and 2,604,512 shares of common stock
with  a  weighted  average exercise price of $0.22 and $0.34 were outstanding at
September  30,  2006  and  2005,  respectively,  but  were  not  included in the
computation  of  diluted  net  loss  per  share  because  their  effect would be
antidilutive.


NOTE 9 -- Stock Based Compensation
----------------------------------
The  Company's  1997  Plan,  which is shareholder approved, permits the grant of
share  options  and shares to its employees for up to 6,369,365 shares of common
stock  as  stock  compensation  and  3,202,738  shares

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2006

were  available  for grant as of September 30, 2006. All stock options under the
1997  Plan are granted at the fair market value of the common stock at the grant
date.  Employee  stock  options  vest  ratably usually over a three or five-year
period  and generally expire 10 years from the grant date. Stock options granted
to  non-employee  directors  usually  vest  immediately.

Accounting  for  Employee  Awards:
----------------------------------

Effective  January  1,  2006,  the Company's Plan is accounted for in accordance
with the recognition and measurement provisions of SFAS No. 123R, which replaces
SFAS  No.  123,  "Accounting  for  Stock-Based  Compensation,"  and  supersedes
Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued
to  Employees,"  and  related  interpretations.  SFAS 123R requires compensation
costs  related  to  share-based  payment  transactions, including employee stock
options,  to be recognized in the financial statements. In addition, the Company
adheres  to  the guidance set forth within SEC Staff Accounting Bulletin No. 107
title  ("SAB  107"),  which provides the Staff's views regarding the interaction
between  SFAS  No.  123R  and  certain  SEC  rules  and regulations and provides
interpretations with respect to the valuation of share-based payments for public
companies.

Prior  to  January  1,  2006,  the Company accounted for similar transactions in
accordance  with  APB  No.  25  which  employed  the  intrinsic  value method of
measuring  compensation  cost.  Accordingly,  compensation  expense  was  not
recognized  for  fixed stock options if the exercise price of the option equaled
or  exceeded  the  fair  value  of  the  underlying  stock  at  the  grant date.

While  SFAS No. 123R encouraged recognition of the fair value of all stock-based
awards  on  the date of grant as expense over the vesting period, companies were
permitted  to  continue  to apply the intrinsic value-based method of accounting
prescribed  by  APB No. 25 and disclose certain pro-forma amounts as if the fair
value  approach  of  SFAS No. 123R had been applied.  In December 2002, SFAS No.
148,  Accounting  for  Stock-Based  Compensation-Transition  and  Disclosure, an
amendment  of  SFAS  No.  123,  was  issued,  which,  in  addition  to providing
alternative  methods  of  transition  for  a  voluntary change to the fair value
method  of  accounting  for  stock-based  employee  compensation,  required more
prominent  pro-forma  disclosures  in  both  the  annual  and  interim financial
statements.  The  Company  complied  with  these disclosure requirements for all
applicable  periods  prior  to  January  1,  2006.

In  adopting SFAS 123R, the Company applied the modified prospective approach to
transition. Under the modified prospective approach, the provisions of SFAS 123R
are  to  be  applied  to  new  awards  and  to  awards modified, repurchased, or
cancelled after the required effective date. Additionally, compensation cost for
the portion of awards for which the requisite service has not been rendered that
are  outstanding  as  of  the required effective date shall be recognized as the
requisite  service  is  rendered  on  or  after the required effective date. The
compensation  cost  for  that portion of awards shall be based on the grant-date
fair  value  of  those  awards as calculated for either recognition or pro-forma
disclosures  under  SFAS  123R.

As  a  result  of the adoption of SFAS 123R, the Company's results for the three
and  nine  months  ended  September  30,  2006  include share-based compensation
expense  totaling  approximately  $9,000 and $26,000, respectively. Such amounts
have  been included in the Consolidated Statements of Operations within selling,
general  and  administrative expenses. No income tax benefit has been recognized
in the income statement for share-based compensation arrangements as the Company
has  provided  for 100% valuation allowance on net deferred tax assets. No stock
option  compensation  expense was recorded under APB No. 25 in the Statements of
Operations  in  the  nine  months  ended  September  30,  2005.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2006


Employee  stock  option compensation expense in 2006 is the estimated fair value
of options granted amortized on a straight-line basis over the requisite service
period for entire portion of the award. The Company has not adjusted the expense
by  estimated  forfeitures, as required by SFAS 123R for employee options, since
the  forfeiture rate based upon historical data was determined to be immaterial.

Accounting  for  Non-employee  Awards:
--------------------------------------
The  Company  previously  accounted  for  options  granted  to  its non-employee
consultants  and  non-employee  registered  representatives using the fair value
cost  in  accordance  with SFAS 123 and EITF No. 96-18. The adoption of SFAS No.
123R and SAB 107 as of January 1, 2006, had no material impact on the accounting
for  non-employee  awards.  The  Company  continues  to  consider the additional
guidance  set  forth in EITF Issue No. 96-18, "Accounting for Equity Instruments
That  Are  Issued  to Other Than Employees" ("EITF 96-18"). There was $2,000 and
$5,000  of  stock  compensation  expense  related to non-employee options in the
three  and  nine  month  periods  ended  September  30,  2006  included  in  the
Consolidated  Statement of Operations within selling, general and administrative
expenses. No stock compensation expense was recorded in the three and nine month
periods  ended  September  30,  2005.

The weighted average estimated fair value of stock options was $0.06 for options
granted  during  the nine months ended September 30, 2006, and $0.08 for options
granted  during  both  the  three  and  nine  months  ended  September 30, 2005,
respectively.  The  fair  value  of  options  at the date of grant was estimated
using  the  Black-Scholes  option  pricing model.  During 2006, the Company took
into  consideration  guidance  under  SFAS  123R  and SAB 107 when reviewing and
updating  assumptions.

The expected volatility is based upon historical volatility of the Company stock
and  other  contributing factors. The expected term is based upon observation of
actual  time  elapsed  between  date  of  grant  and exercise of options for all
employees. Previously such assumptions were determined based on historical data.

The assumptions used for the specified reporting periods and resulting estimates
of weighted average fair value per share of options granted during those periods
were  as  follows:

                               Three Months Ended          Nine Months Ended
                                  September 30,               September 30,
                                2006       2005            2006          2005
                                ----       ----            ----          ----
Risk-free interest rate          --       4.00%            4.46%         4.0%
Expected dividend yield          --          0%               0%           0%
Expected lives                   --      5 years         2-3 years    2-5 years
Expected volatility              --        127%             100%         123%

No  options  were  granted  in  the  third  quarter  ended  September  30, 2006.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2006

The  following  table  illustrates the pro forma effect on net loss and loss per
share  as  if  the  fair  value recognition provisions of SFAS No. 123R had been
applied  to  all  outstanding  and  unvested awards in the prior year comparable
period:


                               Three Months Ended Ended        Nine Months Ended
                                      September 30,              September 30,
                                          2005                       2005
                                          ----                       ----

Net loss, as reported                   $ (296)                    $(1,086)
Add: Stock based compensation
 expense included in reported net loss     ---                         ---

Deduct: Employee stock option
compensation expense determined under
fair value based method for all
employee awards (no tax effect)             (7)                        (18)
                                       --------                    --------
Pro forma net loss                     $  (303)                    $(1,104)
                                       ========                    ========
Net loss per common share:
  As reported-basic and diluted        $ (0.00)                    $ (0.01)
                                       =======                     ========
Pro forma-basic and diluted            $ (0.00)                    $ (0.01)
                                       =======                     ========

The  following  table  represents the Company's stock options granted, cancelled
and  exercised  during  the  nine  months  ended  September  30,  2006:

                                                         Weighted
                                 Number of   Weighted     Average     Aggregate
                                  Shares     Average     Remaining     Intrinsic
                                Subject to   Exercise   Contractual     Value
                                 Issuance    Price         Term         ($000)
                                 --------    --------   -----------   ----------
Outstanding at Dec. 31, 2005     2,431,524    $ 0.35
Granted                            650,000      0.10
Cancelled                         (511,524)     0.72
Exercised                         (115,000)     0.06                       6
                                 ----------    ------
Outstanding at Sept. 30, 2006    2,455,000    $ 0.22     7.54 years        0
                                 ==========    =====     ==========        =

Exercisable at Sept. 30, 2006    1,135,000    $ 0.36     5.78 years        0
                                 ==========    =====     ==========        =

The  aggregate  intrinsic  value  of  options  has  been shown as $0 because the
weighted  average exercise price of the price of the outstanding and exercisable
option  shares  exceeded  the  quarter  end market price of the Company's common
stock.

As  of  September 30, 2006, there was $91,000 of total unrecognized compensation
cost, net of estimated forfeitures, related to all unvested stock options, which
is expected to be recognized over a weighted average period of approximately 3.4
years.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
September  30,  2006


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations.
--------------

Certain Factors That May Affect Future Results
----------------------------------------------

Information  contained  or  incorporated by reference in this periodic report on
Form  10-QSB  and  in  other  SEC  filings  by  Sentry contains "forward-looking
statements"  within  the meaning of the Private Securities Litigation Reform Act
of  1995  which can be identified by the use of forward-looking terminology such
as  "believes,"  "expects,"  "may,"  "will,"  "should"  or  "anticipates" or the
negative  thereof,  other  variations  thereon  or comparable terminology, or by
discussions  of  strategy.  These  forward-looking  statements  involve  certain
significant  risks  and  uncertainties, and actual results may differ materially
from the forward-looking statements. For further details and discussion of these
risks  and  uncertainties  see  Sentry  Technology  Corporation's  SEC  filings
including,  but  not  limited to, its annual report on Form 10-KSB. No assurance
can  be given that future results covered by the forward-looking statements will
be  achieved,  and  other  factors  could  also  cause  actual  results  to vary
materially  from  the future results covered in such forward-looking statements.
We  do  not  undertake  to  publicly update or revise any of our forward-looking
statements  even if experience or future changes show that the indicated results
or  events  will  not  be  realized.

Results  of  Operations:
------------------------

Consolidated  revenues were 29% lower in the quarter ended September 30, 2006 as
compared  to  the  quarter  ended September 30, 2005.  For the nine month period
ended  September  30, 2006 consolidated revenues were 21% lower than in the same
period  of  last year.  Our backlog of orders, which we expect to deliver within
the  next  twelve months, was $2.8 million at September 30, 2006, a 75% increase
as  compared  to  $1.6  million  at  September 30, 2005.  Total revenues for the
periods  presented  are  broken  out  as  follows:

                       Q-3       Q-3         %        9 Mos.    9 Mos.         %
                      2006      2005    Change         2006      2005     Change
                      ----      ----    ------        -----     -----     ------
                       (in thousands)                  (in thousands)

EAS                  $1,417    $1,961    (28)        $ 4,793   $ 5,153       (7)
CCTV                     47       523    (91)            422     1,291      (67)
SentryVision            767       859    (11)          1,827     2,274      (20)
                     ------    ------    ----        -------   --------     ----
Total sales           2,231     3,343    (33)          7,042     8,718      (19)

Service, installation
and other               512       518     (1)          1,341     1,903      (30)
                     ------    ------    ----        -------   --------     ----
Total revenues       $2,743    $3,861    (29)        $ 8,383   $10,621      (21)
                     ======    ======    ====        =======   ========     ====


Sales  in  the  third  quarter  of  2006 continued to be soft across all product
lines.  In  the  first  nine  months  of 2006, approximately $1.0 million of the
overall decrease in comparative total revenues of $2.2 million was attributed to
Lowe's  Home  Centers.

We  had growth in EAS sales in the North American library sector principally due
to  higher sales of our QuickCheck patron self check book-borrowing systems.  In
addition,  we increased EAS sales to library dealers in South America and Mexico
in  both  the third quarter and first nine months of 2006.  However, these gains
were more than offset by decreases in EAS sales to retail customers particularly
in  the  second  and  third quarters of 2006. The reduction in CCTV sales in the
third  quarter  and first nine months of 2006 as compared to the same periods in
2005  was  principally  a result of lower sales to Lowe's and Goody's.  Domestic
sales of our SentryVision  SmartTrack system were lower in the third quarter and
first  nine months of 2006 when compared to the same periods of 2005 principally
as  a  result  of  continued  delays  in

<PAGE>

SENTRY TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
September  30,  2006

several  installation  with  major  retailers.  International  dealer  sales  of
SentryVision  were lower in both periods of 2006 primarily due to lower sales in
the  UK  market. Our sales of SentryVision products to our international dealers
and distributors are denominated in U.S. dollars, therefore the strengthening of
the Euro and other foreign currencies against the U.S. dollar had no significant
impact on revenues. Service and maintenance revenues were substantially lower in
the  first  nine  months  of  2006  as  a  result  of cancellation of the Lowe's
maintenance  contract.  Installation  revenues were lower in 2006 as compared to
2005  due  to  lower  CCTV  and  SentryVision  sales.

Cost  of  sales  were  55%  and  54%  in  the three and nine month periods ended
September  30,  2006  compared  to 54% of total sales in both the three and nine
month periods ended September 30, 2005. The increase in percentage for the third
quarter  of  2006  is  primarily  due to reduced selling prices to international
dealers, particularly in South America and Mexico, offset partially by increased
margins  at  our  51%  owned  labeling  subsidiary.

The  decrease  in  customer service expenses in the third quarter and first nine
months of 2006 as compared to the third quarter and first nine months of 2005 is
primarily a result of a decrease in the number of customer service employees and
lower  outside  service  contractor  costs.

Selling,  general and administrative expenses were 13% and 1% lower in the three
and  nine  month  periods  ended  September  30,  2006 when compared to the same
periods of the previous year.  The decreases in expenses in 2006 are principally
a  result  of  administrative cost reductions including reduced headcount, lower
legal,  insurance,  and freight costs, as well as lower foreign exchange losses.
These  were  partially  offset  by  increases  in  sales personnel and increased
funding  of  sales  and  marketing  programs.

The  increase  in  research  and  development  in the third quarter of 2006 when
compared  to the third quarter of 2005 is primarily a result of increased use of
engineering  consulting  firms.  The  decrease  in the first nine months of 2006
compared  to the first nine months of 2005 was principally a result of decreased
prototype  costs  associated  with  the introduction of new EAS systems in 2005.

Total  interest  and  financing costs were higher in the third quarter and first
nine months of 2006 compared to the third quarter and first nine months of 2005.
The  increase  is  partially  result  of  higher  interest  rates  on short term
borrowings  under  the  credit  facility, as well as additional financing costs,
particularly  in  the  third quarter, related to the loan guarantees provided by
the  Company's  directors.

The income tax expense in all the periods presented principally results from the
taxable  income  of  one of our Canadian subsidiaries, which cannot be offset by
Sentry's  net  operating  loss  carryforwards.

As  a  result  of the foregoing, Sentry had losses of $683,000 and $2,011,000 in
the  quarter  and nine months ended September 30, 2006 as compared to net losses
of  $296,000  and  $1,086,000 in the quarter and nine months ended September 30,
2005.


Liquidity  and  Capital  Resources  as  of  September  30,  2006

At  September  30,  2006,  we  had cash of $0.4 million, working capital of $1.5
million,  total assets of $8.9 million and shareholders' equity of $0.8 million.
We  utilized  $0.7  million  in  cash  in  operating  activities

<PAGE>

SENTRY TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
September  30,  2006

in  the  first  nine  months  of 2006 despite the loss of $2.0 million. Cash was
principally  used  to  finance  increases  in  inventory  levels  purchased  in
anticipation  of higher sales activity levels. This was offset by cash generated
from reductions in accounts receivable resulting from the decline in revenues as
well  as  an  increase  in  accounts  payable  and  accrued  liabilities.

Our  investing activities used net cash of $117,000 during the first nine months
of 2006 principally for the purchase of manufacturing equipment at our 51% owned
labeling  plant.  There  are  no  significant  projected  capital  expenditure
requirements  anticipated  through the remainder of the year, however, the level
of  spending  will  be  dependent  upon various factors, including growth of the
business  and  general  economic  conditions.

We  generated  $380,000  in net cash from financing activities in the first nine
months  of  2006  through  an  increase  during  the  third  quarter  of 2006 in
borrowings  under  our  credit  facility  and  the  exercise  of  stock options.
Borrowing  availability under the credit facility had previously been based upon
the  level of receivables and inventory, which declined in the first nine months
of  2006.  The  increased availability under the credit facility was principally
related  to  the  loan  guarantees  provided  by  our  directors.

In  May  2006,  the  Company and certain of its subsidiaries amended its secured
credit  facility  with Royal Bank of Canada ("RBC") by extending the term of the
agreement  through  May  2007  and  modifying  certain  financial covenants.  In
addition,  the  maximum  borrowings  under the facility were reduced to Canadian
$3.6  million  (U.S.  $3.2  million).  However, RBC increased the borrowing base
formula  by  Canadian  $1.0  million  (U.S. $895,000) in exchange for additional
security  provided  by  two  of  the  Company's directors.  Borrowings under the
facility  are  subject  to certain limitations based on a percentage of eligible
accounts  receivable  and  inventories as defined in the agreement.  Interest is
payable  at  a  rate  of  Royal Bank of Canada prime rate (6.0% at September 30,
2006),  plus  1.75%  per  annum.  Borrowings  under this facility are secured by
substantially  all  of  the  Company's  assets.  As  of  September 30, 2006, the
Company  had  borrowings  of  $2.4  million  under  this facility, which was the
maximum  available  under  the facility.  As a result of continued losses, as of
September  30, 2006, we were in default of certain financial covenants under the
credit  agreement.  We  are  presently in negotiations with RBC to further amend
the  covenants.

We  will require positive cash flows from operations to meet our working capital
needs  over  the next twelve months.  Sentry's revenues declined and we incurred
an  operating  loss in 2005.  This trend continued through the first nine months
of  2006  and  substantially  reduced  the Company's available cash reserves and
limited  our  ability  to  secure  additional bank financing.  A majority of the
Company's  cash is held at the 51% owned subsidiary.  The Company has instituted
certain  plans  to  increase  its  revenue  base  as  well as preserve its cash,
including  cost cutting measures and inventory reduction initiatives.  We made a
substantial  investment  in  the  sales  and marketing infrastructure during the
first  nine  months  of  2006  and  anticipated  a substantial increase in sales
particularly  in  the  SentryVision  SmartTrack  product  line which has not yet
occurred.  While  we  believe that we have developed solid sales leads with some
of  the  world's  largest  retailers,  we  continued to see delays in receipt of
current  orders, which caused us to operate in a cash flow deficit for the first
nine  months  of  the  year.

We  anticipate  revenue  growth in new and existing markets.  We are striving to
continue  to  improve our gross margins and control our selling expenses and our
general  and  administrative expenses.  There can be no assurance, however, that
changes in our plans or other events affecting our operations will not result in
accelerated  or  unexpected  cash requirements, or that we will be successful in
achieving  positive

<PAGE>

SENTRY TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
September  30,  2006

cash  flow  from  operations  or obtaining adequate financing through our credit
facility.  Our  future  cash  requirements  are  expected  to depend on numerous
factors,  including,  but  not  limited to: (i) the ability to generate positive
cash  flow  from  operations;  (ii)  the  ability to raise additional capital or
obtain  additional  financing;  and (iii) economic conditions. In the event that
sufficient  positive  cash  flow  from operations is not generated, we will seek
additional  financing to satisfy current operating cash flow deficiencies. There
can  be  no  assurance,  however, that additional financing will be available on
terms  that  are satisfactory to the Company, or that any such financing will be
sufficient  to  provide  the  full  amount  of  funding  necessary.


Related  Party  Transactions
----------------------------
Details of related party transactions are included in Note 6 of this Form
10-QSB.


Item  3.  Controls  and  Procedures

As  of  the  end  of  the  period  covered  by  this  report,  Sentry Technology
Corporation  carried  out  an  evaluation,  under  the  supervision and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive  Officer  and  Chief  Financial  Officer,  of the effectiveness of the
design  and  operation  of  the  Company's  disclosure  controls  and procedures
pursuant  to Rule 13a-15 of the Securities and Exchange Act of 1934.  Based upon
that  evaluation,  the  Chief  Executive  Officer  and  Chief  Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting  them  to  material  information related to the Company that is
required to be included in Sentry Technology Corporation's periodic SEC filings.

There  has  been  no  change  in  the  Company's internal control over financial
reporting during the period covered by this report that has materially affected,
or  is  reasonable  likely  to materially affect, the Company's internal control
over  financial  reporting.


PART II  - OTHER INFORMATION


Item 6 - Exhibits

(a)     Exhibits:

31.1 - Certification by the Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

31.2 - Certification by the Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

32.1 - Certification by the Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.***

32.2 - Certification by the Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.***

***     In  accordance  with Item 601(b)(32)(ii) of Regulation S-K, this exhibit
shall not be deemed "filed" for the purposes of Section 18 of the Securities and
Exchange  Act of 1934 or otherwise subject to the liability of that section, nor
shall  it be deemed incorporated by reference in any filing under the Securities
Act  of  1933  or  the  Securities  Exchange  Act  of  1934.


<PAGE>


SIGNATURES


Pursuant  to  the  requirements  of the Securities and Exchange Act of 1934, the
registrant  had  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.




                               SENTRY TECHNOLOGY CORPORATION
                               -----------------------------


Date:  November 14, 2006       By:  /s/PETER J. MUNDY
       -----------------            -----------------
                                    Peter J. Mundy, Vice President - Finance
                                    and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)

<PAGE>

SECTION 302 CERTIFICATION:                                         EXHIBIT 31.1



 CERTIFICATION PURSUANT TO RULE 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
   1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, PETER L. MURDOCH, CERTIFY THAT:

1.   I have reviewed this Quarterly Report on Form 10-QSB of Sentry Technology
Corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

4.   The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     A. Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure the material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

     B. Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principals;

     C. Evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

     D.  Disclosed in this report any change in the Registrant's internal
control over financial reporting that occurred during the Registrant's most
recent fiscal quarter that materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.

5.   The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
Registrant's auditors and the Audit Committee of Registrant's Board of Directors
(or persons performing the equivalent function):

     A. All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are reasonably
likely to adversely affect the Registrant's ability to record, process,
summarize and report financial information; and

     B. Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control over
financial reporting.

     DATED:     November 14, 2006

     BY:        /S/ PETER L. MURDOCH
     NAME:      Peter L. Murdoch
                ----------------------
     TITLE:     President and Chief Executive Officer


<PAGE>

SECTION 302 CERTIFICATION:                                         EXHIBIT 31.2


 CERTIFICATION PURSUANT TO RULE 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
    1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 202

I, PETER J. MUNDY, CERTIFY THAT:

1.   I have reviewed this Quarterly Report on Form 10-QSB of Sentry Technology
Corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
exchange act rules 13a-14 and 15d-14) for the Registrant and we have:

     A. Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure the material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

     B. Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principals;

     C. Evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

     D.  Disclosed in this report any change in the Registrant's internal
control over financial reporting that occurred during the Registrant's most
recent fiscal quarter that materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.

5.   The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
Registrant's auditors and the audit committee of Registrant's board of directors
(or persons performing the equivalent function):

     A. All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are reasonably
likely to adversely affect the Registrant's ability to record, process,
summarize and report financial information; and

     B. Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control over
financial reporting.

     Dated:     November 14, 2006

     By:        /s/ PETER J. MUNDY
     Name:      Peter J. Mundy
                --------------------
     Title:     Vice President and Chief Financial Officer


<PAGE>

SECTION 906 CERTIFICATION:                                         EXHIBIT 32.1


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                               ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


Certification of CEO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on Form 10-QSB for the period ended September 30, 2006 as filed with
the  Securities  and  Exchange  Commission  on the date hereof (the Report"), I,
Peter  L.  Murdoch, Chief Executive Officer of the Company, certify, pursuant to
Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act  of  2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  financial  condition  and  results of operations of the Company.


                           /s/ PETER L. MURDOCH
                          -------------------------------------------------
                          Peter L. Murdoch
                          President and Chief Executive Officer

                          November 14, 2006


A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.



<PAGE>

SECTION 906 CERTIFICATION:                                          EXHIBIT 32.2


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                               ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Certification of CFO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on Form 10-QSB for the period ended September 30, 2006 as filed with
the  Securities  and  Exchange  Commission  on the date hereof (the Report"), I,
Peter  J.  Mundy,  Chief  Financial Officer of the Company, certify, pursuant to
Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act  of  2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  financial  condition  and  results of operations of the Company.



                              /s/ PETER J. MUNDY
                              -------------------------------------------------
                              Peter J. Mundy
                              Vice President and Chief Financial Officer

                              November 14, 2006


A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.